Here’s is something worth pondering for a few minutes:
On Tuesday, [Freedom] caucus chairman Rep. Mark Meadows (R-N.C.) said he would not vote for a final tax bill if the corporate rate rises above 20 percent. That is the rate proposed in the [Republican tax] framework.
Unlike, say, the Congressional Black Caucus, the Freedom Caucus doesn’t have an official roster, and it doesn’t have a mission statement. It’s hard to define exactly what it is even though Rep. Meadows is consistently labeled as their chairman. Yet, we all talk about it and seem to know what we mean most of the time. Wikipedia says “the caucus is sympathetic to the Tea Party movement” and “is considered the farthest-right grouping within the House Republican Conference,” which appears accurate to me. You’ll see them variously described as “populist” or “antiestablishmentarian.” At least in theory, they’re a contrast to the classic Connecticut Yankee country club Republican typified by the Bush family before they started making accommodations to the Reagan wing of the party. The Freedom Caucus shouldn’t be carrying water for Wall Street. If this were The Grapes of Wrath, they’d be looking to string up the bankers who’ve come from New York to repossess the tractors and farms.
Yet, the chairman’s bottom line position on tax reform pertains to corporate rate of taxation. He wants it lower.
Now back in July, the Freedom Caucus refused to support the House Budget Committee’s plan because they wanted to see the tax reform plan first. The Budget Committee chairwoman, Rep. Diane Black of Tennessee, argued that she needed the budget to unlock the special reconciliation rules that allow the Senate to avoid a Democratic filibuster, and only after she had an approved budget in hand would they be able to really get down to work on the details of their tax plan. That created a chicken and egg problem that has so far remained unresolved.
There has been progress, however, and earlier this week the Freedom Caucus announced that they would go along with the tax framework (as limited as it is) that the leadership unveiled. This presumably means that they’ll vote for the budget despite all their previous concerns and demands on deficit reduction and entitlement reforms which have otherwise gone unmet.
Likewise, the Senate Budget Committee sounds like they’re ready to move their budget, although you should be astounded to see how their confidence contrasts with their uncertainty. Sen. Pat Toomey of Pennsylvania is quoted, saying “I think within probably the following week we’ll be on the Senate floor with a budget.” But then there is this:
One major question is whether Republicans will insist on including plans for major reforms to entitlement programs and other deficit-reduction measures in the budget document. An alternative would be to pass a “shell” budget that steered clear of politically difficult questions about major reforms, and just unlocked the reconciliation procedure.
Toomey said that he wasn’t sure which direction the panel would take.
Another way of putting this is that the Republicans still don’t know if they can pass a budget. If they can’t, they’re prepared to pass a “shell” of a budget that doesn’t actually contain a budget at all. It would be nothing but budget reconciliation instructions that are piggy-backed on an otherwise empty and hijacked budget bill. It’s a way of abiding by and taking advantage of the Byrd Rule while violating everything that the Byrd Rule was designed to do.
This is precisely what the Republican leadership did back in January to fast-track their effort to repeal Obamacare. They took the bill that was supposed to be last year’s budget and hollowed it out. What they put in wasn’t a budget at all, but simply instructions for the committees with jurisdiction on health care. This allowed them to do precisely what the late Sen. Robert Byrd sought to avoid, which is to use the budget process to enact legislation that could not ordinarily pass under regular order.
At the time, the Freedom Caucus was extremely unhappy with the tactic because they always want to use the budget process to drive cuts in government spending. In fact, at first the Freedom Caucus members were confused by the procedural gambit they were being asked to support and had to be reassured that “it wasn’t a real budget.” They were won over with the promise that they could wage their budget battle over the summer as this year’s “real” budget was negotiated.
And the Freedom Caucus did attempt to extract concessions during the budget negotiations, which led ultimately to a stalemate and explains why the full House still hasn’t produced one. As I began pointing out repeatedly in August, the Republicans were not going to be able to do tax reform if they remained deadlocked on a budget, and that meant that the Freedom Caucus would have to back down.
It appears that we’ve finally gotten to the point where the Freedom Caucus understands that they can’t get the tax cuts they want if they don’t vote for a new budget, and if that budget has to be an empty shell (again), then they are perhaps prepared to admit they were taken for a ride back in January. That’s really what Sen. Pat Toomey is saying when he explains that he’s not sure which direction his party will take.
Procedurally, both the House and Senate need to pass a budget. Those budgets will need reconciliation instructions for tax reform (and possibly for Obamacare repeal, too). The two bills will then have to be melded into one bill, probably in a Conference Committee. And then each chamber will have to pass the melded bill with no amendments. If they can accomplish that, their job is done. Budget resolutions do not become laws and don’t go to the White House for the president’s signature.
Now, some Republicans (including Sen. Lindsey Graham of South Carolina) say they won’t vote for a budget resolution that doesn’t include instructions for eliminating the Affordable Care Act. The Freedom Caucus has spent all year promising that they won’y vote for a budget resolution that doesn’t include large, specified cuts to entitlements.
But then we see Freedom Caucus saying that they’re on board with tax reform, and we see Lindsey Graham saying that enacting tax reform is “the difference between succeeding as a party and failing. It’s the difference between having a majority in 2018 or losing it. It’s the difference between one term and two.”
What it looks like is that a whole lot of this year’s effort and rhetoric and ambitions are going to be set aside and wasted in order simply to get a chance to pass tax cuts at the fifty-vote threshold in the Senate. And, for the Freedom Caucus, despite their populist reputation, the only thing they really care about is that the corporate rate of taxation not exceed twenty percent.
To me, this is a completely fraudulent kind of economic populism.
I also wonder about their judgment. I definitely do understand the sentiment that the Republican Party desperately needs to accomplish something major legislatively, but what they’re seeking to do here won’t actually be popular except among their donor class. The donors are obviously important, but they just helped Mitch McConnell outspend Roy Moore more than five to one in the Alabama special election and it didn’t prevent Luther Strange from losing his Senate seat. Donors only get one vote each, and doing their bidding at your base’s expense isn’t obviously a way to improve your popularity.
So, in conclusion, we first want to see if the House and Senate can each pass a real budget. If they can, we’ll see if they can meld them together into one bill and pass it. If they can’t do these things, they’ll try to pass another empty shell of a budget.
Only when they’re done with that process will they get to the really hard stuff, which includes trying to devise changes in the tax code that don’t hurt the parochial interests of more than two Republican senators to the point that they won’t vote for them.
And this is going to be attempted despite the fact that back in July, White House Director of Legislative Affairs Marc Short and Treasury Secretary Steve Mnuchin made it known that they didn’t think the tax reform effort could succeed this way and asked that the whole plan be scrapped in favor of a bipartisan process.
We can taste their desperation which will help them move the process forward. But there are so many pitfalls on this path that it’s very hard to predict they’ll ultimately have success.
“And, for the Freedom Caucus, despite their populist reputation, the only thing they really care about is that the corporate rate of taxation not exceed twenty percent. To me, this is a completely fraudulent kind of economic populism.”
I’M SHOCKED! SHOCKED!!!
Your article fails to mention that the GOP could avoid all the angst and drama of reconciliation on their tax plans – IF they are willing to allow the tax provisions to sunset like the 2001 Bush tax cuts. That has to be their fall back position.
After all, it won’t sunset for at least 10 years and the only reason the Bush tax cuts weren’t extended permanently, was that a Democrat was in office. Meanwhile the “donor class” gets their billionaire tax cuts.
The GOP base will never learn about what this bill is doing, because Fox News will never tell them, and the mainstream media is “Fake News” they never watch.
I don’t know why they didn’t do this to begin with. I attended a CLE with one of the staff attorneys who authored the Bush tax cuts and she indicated that the bill’s authors took the cynical position that once tax cuts are enacted, no matter how regressive, it will be difficult to repeal them, since stakeholders rally to protect their cuts. We are currently seeing that dynamic work against Republicans since every lobbyist descends on Washington to demand that their personal tax darlings are protected or extended, not eliminated. Eg: The mortgage industry will fight tooth and nail against any attempt to repeal the home mortgage deduction.
Since they are only getting ONE budget bill for next year, whatever is in it, they can EITHER attempt to pass HCA repeal, OR tax cuts. We’ve already seen they can’t get to 50 votes on “skinny repeal” and the crackpot Libertarians like Rand Paul won’t vote for anything that leaves Obamacare in place.
Nothing will make any of this easier next year when Democrats can beat them over the head with every vote during an election year.
I think their only path forward is to try and do tax reform without reconciliation and then use whatever budget shell bill they can pass to do Obamacare repeal next January.
Only they are not doing that. Instead they are running full tilt into the reconciliation windmill again. McConnell is already doomed because Trump thinks he’s “weak”, and now he’s facing another humiliating failure. To add insult to injury, they will have to shore up the insurance markets or a lot of very wealthy corporations are going to be furious with them. That will provide the added humiliation for Fox News viewers of watching Congress work with Democrats to prevent Obamacare from failing utterly.
Meanwhile, there are going to be a LOT of health care price increases set for 2018. That was always going to happen, because insurers underestimated costs of providing coverage, and underestimated how much insurance they could sell the young and healthy to offset costs. Now it’ll be much worse due to the uncertainty (another Trumpian unforced error). No attempt to dodge the blame by putting it on Obama or Democrats will work. People facing catastrophic price increases or dropped coverage, will blame Republicans.
This will cost them, no doubt about it. The only question is whether it will be enough, given their vote suppression and gerrymander tactics.
Don’t forget that CHIP expires tomorrow and no one, especially on the GOP side, seems to care.
There are certainly Democratic Senate leaders who have spoken out, and made it clear that the time wasted on Graham-Cassidy could have been used to draft the needed legislation to get CHIP funded in time. This is one of the realities of being in the minority – leaders from the minority party can certainly speak out, but unless the will to do what is right is there among those who set the agenda, nothing much will happen. I can blast a series of angry tweets on the matter (harming kids due to failure to legislate is shitty, which is putting it mildly), but without any influence to change things in the short term, those won’t amount to much. Instead, we’ll likely see something marked up next week and voted on. CHIP will get funded again, but with needless turmoil created in the interim.
Have Maddow or Chris Hayes talked about it? Or are both still preoccupied with the Russia thing?
The Rachel Maddow Blog was covering it. I don’t bother much with cable news. Blogs and twitter feeds are where I get a lot of my news and info.
That’s precisely why they WON’T do that, I believe. There is no other way that the oligarchs can smash the rest of the federal government (including eliminating Social Security, Medicare and any other sort of non-defense spending) if they have to do it within a 10 year timeframe.
They’ve been working on this since FDR betrayed them with the New Deal, and their vengeance on the American people for ‘stealing’ from them for all those years is within their grasp.
Hurricane season does not end until 11/30…nothing happens in a vacuum.
Thanks foer the outstanding explainer and analysis.
I’m sorry to ask such a basic question but I’m still confused. Am I right that the Repubs are so far proceeding with their tax cut bill on the basis of reconciliation instructions that they don’t actually have yet because they haven’t passed a budget?
The “Freedom Caucus”.
Freedom of the megarich to not pay their fair share of taxes?
Freedom to screw the poor?
Freedom to ignore laws if you’re rich?
It is an infinite loop, isn’t it?
Booman Tribune and Washington monthly are pretty much the only places you can go on the internet (or anywhere, really) and have this explained.
You shame the MSM every time you do this.
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Like Parallax, I am shocked, shocked to find that our nation’s legislative processes are now nothing other than a scam and fraud! That deficit-hawk Repubs are making a mockery of the Byrd Rule, of all things!!
This premeditated path of fraud and open scammery, of course, goes hand in hand with the fact that the nation’s electoral processes are also a scam and fraud thanks to the “conservative” movement. And with the fact that the national government does not have the consent of the majority. And that, too, is absolutely fine with these phony “populists”.
There is always a lowest common denominator in legislatin’, and that is the passing of tax cuts at the 50 vote threshold in the senate, as you foresee. That can’t be stopped, and will likely be enough payoff for the nation’s plutocrats to continue the revolving credit line for the American Nazi Party—although of course there will be some grumbling.
As for the great unwashed “populists” back home, they wouldn’t understand the label. Keeping the political influence of non-whites and their urban allies suppressed is the entire point of the operation. And they can’t wait to watch any demonstrations in Blue Cities get violently attacked by the militarized po-lice. That’s what “populism” means to them….
What? The Freedom Caucus has never been about protesting bankers foreclosing on farms or the equivalent. They were launched as “protest” movement after a rant by Rick Santelli precisely at the moment the Obama administration was considering bailing out “losers” during the housing market collapse. In fact they wanted more foreclosures! They were angry, sure, that the banks didn’t have to declare bankruptcy, but that was because bondholders were forced to take haircuts outside of the normal bankruptcy process. Nothing says “salt of the earth” like protecting the interests of bondholders.
They were absolutely convinced, if you had read the comments on economic blogs, that the financial crisis was caused by Jimmy Carter who ended Redlining, and Barney Frank, who forced banks to lend to minorities. This isn’t really a disputable history. They wanted foreclosures because people who were losing their houses were losers.
They grew incensed at Shirley Sherrod, but if anyone had paid attention to her actual speech she was telling a story about helping a white farmer avoid foreclosure through a government program during the time of Pigford, when African American farms were somehow magically all found to be ineligible for the program. This isn’t the protest movement that grew out of preventing the next set of Joads. They wanted Joads. It was like the 1880s populists showing up at a foreclosure auction to lynch the farmer so that the banker could take the farm more easily.
Let’s not kid ourselves. When republicans say they want to do “tax reform” what they are really talking about are tax cuts. And those tax cuts tend to be if not exclusively to the benefit of corporations and/or the wealthy then at least very top heavy in that direction. Which means the average working stiff sees little and most of the time zero benefit. I would call that reverse or negative populism, but not real populism.
They justify their con by claiming that cutting taxes on the wealthy “frees up capital” and will “create jobs” and “grow the economy.” This is “trickle down” theory, and history tells us that it has never worked. And recent history, the results of wingnut Kansas Gov. Brownback’s “Kansas experiment” prove once and for all that “trickle down,” which is what this is, is a crock of sh*t. And Brownback even had the benefit of the architect of trickle down, Arthur Laffer, to help him implement it, and it has crashed and burned in spectacular fashion.
https:/www.forbes.com/sites/beltway/2017/06/07/the-great-kansas-tax-cut-experiment-crashes-and-burn
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They only bother with the con as a cover for the real reasons. The reality is tax cuts are not the end goal but a means to actually two end goals. Goal one, a transfer of public wealth into a few wealthy private hands. Goal two, starve the government of resources in order to kill social and “entitlement” programs the republicans hate. The former satisfies the wealth wing of the GOP, the latter satisfies the bigot wing, since they see “those people” as the beneficiaries of these programs. Goal two gets the deplorables on board, and by virtue of that the media does us all a disservice by rushing to call what the GOP is doing as populist.
What people really need to know is what the Trump Old Party plans to implement is essentially what Brownback did in Kansas. And I wish the democrats and the media were out there calling out that connection every time some right wing idiot claims it will grow the economy and create jobs. Brownback turned Kansas into a hellscape. The GOP would love to do the same for the nation.